Property Issues in Holding Pattern

By Ted Claxton

The Elgin legal proceedings have come to a halt for the moment. The legal team for the Scouts Canada Ontario Incorporated Body attacked the representation order that had previously been granted. The court decided that the proper parties had not been designated in the representation order and therefore struck out the proceedings but granted permission to the Elgin Scouters to recommence the proceedings naming appropriate representatives.

In a bully tactic designed to scare off potential representatives, the Ontario Incorporated Body had its lawyers seek, as against an individual scouter, the sum of $58,000 in legal costs.

In matters involving charitable and eleemosynary organizations, the courts generally take special care to balance the interests when there are internal disputes on real issues. The Court declined to award costs to the Ontario Incorporated Body. In doing so, the court rejected the patently unfounded proposition put forward by the Ontario Incorporated Body that the individual Scouter was acting in his own interest. The court also made note of the fact that the Elgin claim was not frivolous. Although the Ontario Incorporated Body has been able to sidetrack the proceedings they have not been permitted to punish the person was attempting to take the representative role.

There are at least four claims that are ready to proceed. We are waiting to see if our National Organization will wake up on this issue and start showing some leadership. This, however, seems unlikely, as the National Organization has taken the position that the Ontario Incorporated Body is an arms length organization. How they can assert this is a mystery since the Scouts Canada By-laws provide that there is a single line of authority through the CEO to the Board of Governors. Furthermore, the terms of the Scouts Canada By-law under which the Ontario Incorporated Bodies were created provides specifically that they must be wholly owned or controlled by Scouts Canada and have powers limited to holding property.

Unfortunately, if the National Organization will not intervene and if the Ontario Incorporated Body will not back off its bully boy attitude, it will be necessary, in order to effectively take on the Ontario Incorporated Body, to gather a litigation fund to protect any persons who would be exposed to costs by reason of being a representative on behalf of the Area or Groups. It would also be prudent to retain a legal firm with the resources to deal effectively with the firm that currently represents the Ontario Incorporated Body.

The Ontario Incorporated Body appears to be intent on playing hard ball so the local Scouters will need a firm that can play in that league. While it may be possible to get a break on the fees it is unlikely that the matter will be handled pro bono. In view of the charitable status of the Ontario Incorporated Body, it is also a possibility that the Court would order that the Public Guardian and Trustee Office become involved since, in Ontario, a trust of charitable property is involved by virtue of the operation of the Charities Accounting Act. This might add a complication and expense to the whole process.

The local Scouting communities came together to create these valuable program assets. It will be up to those local communities and their friends in those communities and members in the wider Scouting community to come up with the necessary financial resources if the case is to be properly and fully presented. The case got sidetracked on a technicality. I am sure that our Scouting communities do not want to loose the resources held in trust for them. The real question is whether we are willing to step up to the plate. Stepping up to the plate will require the establishment and support of a legal proceedings fund. This is a tough issue that will have to be discussed and the ramifications carefully considered.

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